SoK:A Systematic Study of Anonymity in Cryptocurrencies

Blockchain and cryptocurrencies have been widely deployed and used in our daily life. Although there are numerous works in the literature surveying technical challenges and security issues in blockchains, very few works focused on the anonymity guarantees provided in cryptocurrencies. In this work, we conduct a systematic survey on anonymity in cryptocurrencies with a clear categorization for the different tiers of anonymity offered in the various cryptocurrencies as well as their known weaknesses and vulnerabilities. We also study the techniques that have been used to achieve each tier of anonymity. Finally, we asses the current techniques, and present a forecast for the technological trends in this fiel

An Empirical Analysis of Privacy in Cryptocurrencies

Cryptocurrencies have emerged as an important technology over the past decade and have, undoubtedly, become blockchain’s most popular application. Bitcoin has been by far the most popular out of the thousands of cryptocurrencies that have been created. Some of the features that made Bitcoin such a fascinating technology include its transactions being made publicly available and permanently stored, and the ability for anyone to have access. Despite this transparency, it was initially believed that Bitcoin provides anonymity to its users, since it allowed them to transact using a pseudonym instead of their real identity. However, a long line of research has shown that this initial belief was false and that, given the appropriate tools, Bitcoin transactions can indeed be traced back to the real-life entities performing them. In this thesis, we perform a survey to examine the anonymity aspect of cryptocurrencies. We start with early works that made first efforts on analysing how private this new technology was. We analyse both from the perspective of a passive observer with eyes only to the public immutable state of transactions, the blockchain, as well as from an observer who has access to network layer information. We then look into the projects that aimed to enhance the anonymity provided in cryptocurrencies and also analyse the evidence of how much they succeeded in practice. In the first part of our own contributions we present our own take on Bitcoin’s anonymity, inspired by the research already in place. We manage to extend existing heuristics and provide a novel methodology on measuring the confidence we have in our anonymity metrics, instead of looking into the issue from a binary perspective, as in previous research. In the second part we provide the first full-scale empirical work on measuring anonymity in a cryptocurrency that was built with privacy guarantees, based on a very well established cryptography, Zcash. We show that just building a tool which provides anonymity in theory is very different than the privacy offered in practice once users start to transact with it. Finally, we look into a technology that is not a cryptocurrency itself but is built on top of Bitcoin, thus providing a so-called layer 2 solution, the Lightning network. Again, our measurements showed some serious privacy concerns of this technology, some of which were novel and highly applicable

Cashless Societies and the Rise of the Independent Cryptocurrencies: How Governments Can Use Privacy Laws to Compete with Independent Cryptocurrencies

Many individuals (including governments) envision living in a future world where physical currency is a thing of the past. Many countries have made great strides in their efforts to go cashless. At the same time, there is increasing awareness among citizens of the decreasing amount of privacy in their lives. The potential hazards cashless societies pose to financial privacy may incentivize citizens to hold some of their money in independent cryptocurrencies. This article argues that in order for governments in cashless societies to keep firm control over their money supply, they should enact stronger privacy law protections for its citizens in order to decrease the real or perceived loss of (financial) privacy. This paper compares the privacy laws that exist today in both the United States and the European Union and suggests combining elements of both legal systems in order create a more privacy-friendly legal framework that can enable governments to complete against independent cryptocurrencies